Thursday, April 8, 2010

Why Working People

Are Angry and Why

Politicians Should Listen

Remarks by AFL-CIO President Richard L. Trumka at the Institute of Politics, Harvard Kennedy School, April 07, 2010

Good evening. Thank you, John. I will never be able to express how much I owe you and how much the American labor movement owes you. The Institute of Politics is fortunate to have you as a fellow this semester. And let me add my thanks to the Institute of Politics and Bill Purcell for inviting me to be here with you tonight.

I am going to talk tonight about anger—and specifically the anger of working people. I want to explain why working people are right to be mad about what has happened to our economy and our country, and then I want to talk about why there is a difference between anger and hatred. There are forces in our country that are working hard to convert justifiable anger about an economy that only seems to work for a few of us into racist and homophobic hate and violence directed at our President and heroes like Congressman John Lewis. Most of all, those forces of hate seek to divide working people – to turn our anger against each other.

So I also want to talk to you tonight about what I believe is the only way to fight the forces of hatred—with a strong progressive tradition that includes working people in action, organizing unions and organizing to elect public officials committed to bold action to address economic suffering. That progressive tradition has drawn its strength from an alliance of the poor and the middle class—everyone who works for a living.

Alliance with Public Intellectuals

But the alliance between working people and public minded intellectuals is also crucial—it is all about standing up to entrenched economic power and the complacency of the affluent. It's an alliance that depends on intellectuals being critics, and not the servants, of economic privilege.

I am here tonight at the Kennedy School of Government to say that if you care about defending our country against the apostles of hate, you need to be part of the fight to rebuild a sustainable, high wage economy built on good jobs – the kind of economy that can only exist when working men and women have a real voice on the job.

Our republic must offer working people something other than the dead-end choice between the failed agenda of greed and the voices of hate and division and violence. Public intellectuals have a responsibility to offer a better way.

The stakes could not be higher. Mass unemployment and growing inequality threaten our democracy. We need to act—and act boldly—to strike at the roots of working people's anger and shut down the forces of hatred and racism.

We have to begin the conversation by talking about jobs—the 11 million missing jobs behind our unemployment rate of 9.7 percent.

Now, you may think to yourself, that is so retro. Jobs are so twentieth century. Sweat is for gyms, not workplaces.

For a generation, our intellectual culture has suggested that in the new global age, work is something someone else does. Someone we never met far away in an export processing zone will make our clothes, immigrants with no rights in our political process or workplaces will cook our food and clean our clothes.

And for the lucky top 10 percent of our society, that has been the reality of globalization—everything got cheaper and easier.

But for the rest of the country, economic reality has been something entirely different. It has meant trying to hold on to a good job in a grim game of musical chairs where every time the music stopped, there were fewer good jobs and more people trying to get and keep one. Over the last decade, we lost more than 5 million manufacturing jobs—a million of them professional and design jobs. We lost 20 percent of our aerospace manufacturing jobs. We're losing high-tech jobs—the jobs we were supposed to keep.

For most of us, economic reality has meant trying to pay for the ever-more-expensive education needed to pursue a good job—the cost of a college degree has gone up more than 24 percent since 2000 while average wages and salaries have increased less than one percent. It has meant trying to pay for exorbitant health care as employer coverage went away or got hollowed out. It has meant trying to eke out a decent retirement even as the private sector shed real pensions and long-term investment returns evaporated. Meanwhile, Wall Street middlemen raked in the bonuses.

And that was the reality for most Americans before the Great Recession began in 2007. Since then, we have lost 8 million jobs when the economy needed to add nearly three million just to keep up with population growth. That's 11 million missing jobs.

We used the public's money to bail out the major banks, only to see those same banks return to the behavior that got us here in the first place—aggressive risk taking in securities and derivatives markets, and handing out gigantic bonuses. Most galling of all—they used the funds we gave them -- courtesy of TARP and endless cheap credit from the Federal Reserve -- to fight even the most modest, common sense reforms of our financial system.

President Obama's economic recovery program has done a lot of good for working people—creating or saving more than 2 million jobs. But the reality is that 2 million jobs is just 18 percent of the hole in our labor market.

Anger caused by shrinking jobs and pay

The jobs hole – and the decades-long stagnation in real wages -- are the source of the anger that echoes across our political landscape. People are incensed by the government's inability to halt massive job loss and declining living standards, on the one hand, and the comparative ease with which government led by both parties has made the world safe again for JP Morgan, Goldman Sachs and Citigroup, on the other hand.

Rescuing the big banks hasn't done much for Main Street. The very same financial institutions that got bailed out have not only cut way back on lending to business, they have never stopped foreclosing on American families' homes.

The fact is that for a generation we have built our economy on a lie—that we can have a low-wage, high-consumption society and paper over the contradiction with cheap credit funded by our foreign trading partners and financial sector profits made by taking a cut of the flow of cheap credit.

So now a lot of Americans are angry. And we should be angry. And just as we have seen throughout history, there are plenty of purveyors of hate and division looking to profit from our hurt and our anger.

I am a student of history, and now is the time to remember our history as a nation. Remember that when President Franklin Roosevelt said, "We have nothing to fear but fear itself," other voices were on the radio, voices saying that what we really needed to fear was each other – voices preaching anti-Semitism and Nazi-style racial hatred.

Remember that when President John F. Kennedy stepped off the plane in Dallas on November 22, 1963, radio voices were calling for violence against the President of the United States. And the violence came—and took John and Robert Kennedy and Martin Luther King and Medgar Evers and so many others.

But in the United States, we chose to turn away from the voices of hatred at those critical moments in the twentieth century. In much of Europe, racial hatred and political violence prevailed in response to the mass unemployment of the Great Depression. And in the end, we had to rescue those countries from fascism-- from the horrible consequences of the failure of their societies to speak to the pain and anger bred by mass unemployment.

Why did our democracy endure through the Great Depression? Because working people discovered it was possible to elect leaders who would fight for them and not for the financial barons who had brought on the catastrophe. Because our politics offered a real choice besides greed and hatred. Because our leaders inspired the confidence to reject hate and charted a path to higher ground through broadly shared prosperity.

This is a similar moment. Our politics have been dominated by greed and the forces of money for a generation. Now, amid the wreckage that came from that experiment, we hear the voices of hatred, of racism and homophobia.

At this moment of economic pain and anger, political intellectuals face a great choice—whether to be servants or critics of economic privilege. And I think this is an important point to make here at Harvard. The economic elites at JP Morgan Chase, Goldman Sachs and the other big Wall Street banks are happy to hire intellectual servants wherever they can find them. But the stronger the alliance between intellectuals and economic elites, the more the forces of hatred—of anti-intellectualism—will grow. If you want to fight the forces of hatred, you have to help empower the forces of righteous anger.

And at this moment, the labor movement is working to give voice to the justified anger of the American people. We need help. We need public intellectuals who will help design the policies that will replace the bubble economy with a real, sustainable economy that works for all of us.

Working people want an American economy that creates good jobs, where wealth is fairly shared, and where the economic life of our nation is about solving big problems like the threat of climate change rather than creating big problems like the foreclosure crisis. We know that growing inequality undermines our ability to grow as a nation by squandering the talents and the contributions of our people and consigning entire communities to stagnation and failure. But despite our best efforts, we have endured a generation of stagnant wages and collapsing benefits—a generation where the labor movement has been much more about defense than about offense.

We in the labor movement have to challenge ourselves to make our institutions into a voice for all working people. And we need to begin with jobs. Eleven million missing jobs is not tolerable. That's why we are fighting for the AFL-CIO's five point jobs program—extending unemployment benefits, including COBRA health benefits for unemployed workers; expanding federal infrastructure and green jobs investments; dramatically increasing federal aid to state and local governments facing fiscal disaster; creating jobs directly, especially in distressed communities; and finally, lending TARP money to small and medium sized businesses that can't get credit because of the financial crisis.

As we meet tonight, organizers working for the AFL-CIO's 3 million-member community affiliate Working America are knocking on doors across our country talking jobs. We are organizing support for George Miller's Local Jobs for America Act that would target $100 billion in job creation dollars toward our country's hardest hit communities—to keep teachers in the classroom and first responders on the job, and to create new jobs where Wall Street destroyed them. We are organizing support for financial reform and accountability for Wall Street. We are working to counter the Glenn Beck effect and turn anger into action for real change.

Make Speculative Finance Capital Pay to Clean Up Their Mess

But we are not just talking about how to create jobs, we are talking about how to pay for them. Wall Street should pay to clean up the mess they made, and we are supporting four ways for the big banks to pay—President Obama's bank tax, a special tax on bank bonuses, closing the carried interest tax loophole for hedge funds and private equity, and most important, a financial speculation tax levied on all financial transactions—including derivatives—that would raise over $150 billion a year, according to the Congressional Budget Office. The financial speculation tax would have negligible impact on long-term investors, but would discourage the short termism in the capital markets that led to so much destruction over the last decade.

When it comes to creating jobs, some in Washington say: Go slow—take half steps, don't spend real money. Those voices are harming millions of unemployed Americans and their families -- and they are jeopardizing our economic recovery. It is responsible to have a plan for paying for job creation over time. But it is bad economics and suicidal politics not to aggressively address the job crisis at a time of stubbornly high unemployment. In fact, budget deficits over the medium and long term will be worse if we allow the economy to slide into a long job stagnation -- unemployed workers don't pay taxes and they don't go shopping; businesses without customers don't hire workers, they don't invest and they also don't pay taxes.

But we must do much more to restore broadly shared prosperity.

We must take action to restore workers' voices. The systematic silencing of America's workers by denying their freedom to form unions is at the heart of the disappearance of good jobs in America. We must pass the Employee Free Choice Act so that workers can have the chance to turn bad jobs into good jobs, and so we can reduce the inequality which is undermining our country's prospects for stable economic growth.

We must have an agenda for restoring American manufacturing—a combination of fair trade and currency policies, worker training, infrastructure investment and regional development policies targeted to help economically distressed areas. We cannot be a prosperous middle class society in a dynamic global economy without a healthy manufacturing sector.

We must have an agenda to address the daily challenges workers face on the job – to ensure safe and healthy workplaces and family-friendly work rules.

And we need comprehensive reform of our immigration policy based on ending exploitation and securing fairness, working for an America where there are no second class workers.

Each of these initiatives should be rooted in a crucial alliance of the middle class and the poor—the majority of the American people. And those of us in the labor movement know that we can only achieve these great things if we work together with community partners who share our goals, and with government leaders who share our vision.

Government that acted in the interests of the majority of Americans has produced our greatest achievements. The New Deal. The Great Society and the Civil Rights movement -- Social Security, Medicare, the minimum wage and the forty-hour work week, and the Voting Rights Act. This is what made the United States a beacon of hope in a confused and divided world. In the end, I believe the health care bill signed into law last month is an achievement on this order, one we can continue to improve upon to secure health care for all.

But too many thought leaders have become the servants of a different kind of politics—a politics that sees middle-class Americans as overpaid and underworked. That sees Social Security as a problem rather than the only piece of our retirement system that actually works. A mentality that feels sorry for homeless people, but fails to see the connections between downsizing, outsourcing, inequality and homelessness. A mentality that sees mass unemployment as something that will take care of itself, eventually.

We need to return to a different vision.

President Obama said in his inaugural address, "The state of the economy calls for action, bold and swift, and we will act -- not only to create new jobs, but to lay a new foundation for growth." Now is the time to make good on these words – for Congress, for President Obama and for the American people.

These are big challenges. But it is long past time to take them on. If you are worried about the anger in our country, if you don't want the forces of hatred to grow, be a part of the fight for economic justice and a new economic foundation for America. Be a critic of power and privilege, not its servant.

Be the source of the ideas that can rebuild our economy and restore confidence in government. As students, as teachers, as workers—all of us can play a role in this great effort. Whether here within the university, at think tanks, in the government, in the press, or even working with us in the labor movement, working people need the help of engaged policy intellectuals if we are together going to build an economy that works for all.

Think about the great promise of America and the great legacy we have inherited. Our wealth as a nation and our energy as a people can deliver, in the words of my predecessor Samuel Gompers, "more schoolhouses and less jails; more books and less arsenals; more learning and less vice; more leisure and less greed; more justice and less revenge; in fact, more of the opportunities to cultivate our better natures."

That is the American future the labor movement is working for. Let me be clear: There is no excuse for racism and hatred. All Americans need to unite against it. The labor movement must be a powerful voice against it. But you cannot fight hatred with greed. Working people are angry—and we are right to be angry at the betrayal of our economic future. Help us turn that anger into the energy to win a better country and a better world.